LABOR'S closest business adviser, Heather Ridout, has warned Julia Gillard to slow down as the PM prepares to rush out a climate change policy.

As chief executive of the Australian Industry Group, Ms Ridout has offered consistently strong support to the Labor government and was a member of the Henry tax review panel. She told The Weekend Australian yesterday that it would be "over-reaching" for the government to roll out a replacement for the emissions trading scheme ahead of the election and cautioned Ms Gillard to avoid embracing a carbon-tax quick fix, warning that business was not prepared nor ready.

"It is totally the wrong atmosphere -- we are getting way ahead of ourselves," Ms Ridout said. "I think the confidence of business has been really shaken by the breakdown of the domestic consensus on this issue. Business doesn't want the government to be in any hurry to come up with this in the lead-up to the election."When she replaced Kevin Rudd as Prime Minister, Ms Gillard identified the government's position on climate change as one of her key priorities that had to be fixed before going to the polls. She has sharpened the position on the other two priorities -- the mining tax and asylum-seekers -- but has since been embroiled in debates over both.

Criticism is building that Ms Gillard is moving too quickly to address Labor's policy weaknesses in her haste to clear the deck for an election. The government is considering a suite of measures to reclaim support from voters lost to the Greens when Mr Rudd ditched the ETS. These include a controversial idea to place tough new restrictions on all new coal-fired power stations and a national energy-efficiency target. Reports this week have suggested the government is considering setting a price on carbon pollution, while green groups have urged the government to adopt an interim carbon tax.

"I think we need to develop a deep and lasting community consensus about pricing carbon," Ms Gillard said yesterday, declaring herself to be a believer in human-induced climate change. The Prime Minister's special taskforce on energy efficiency has concluded its report to hand to Ms Gillard, calling on her to adopt a national energy efficiency target. The target will lead to bans on many energy-sapping appliances being sold in Australia.

The Weekend Australian understands the government is considering placing an energy-efficiency target on retailers. They could meet the new target by buying "white certificates", which represent an amount of energy they have saved. In practice, certificates can be awarded for a wide range of actions, including replacing inefficient heaters or air conditioners with more efficient models, installing insulation, improving the thermal efficiency of windows, installing energy efficient lighting and buying efficient refrigerators.

There is no national energy efficiency target. Some states have their own energy efficiency schemes such as the Victorian Energy Efficiency Target and the NSW Energy Savings Scheme. South Australia also has a scheme that provides incentives to adopt energy saving measures. While the Greens are pushing for a 3 per cent annual energy efficiency target, The Weekend Australian understands the government's target will be lower.

In an interview with ABC TV's Lateline this week, Ms Gillard would not be drawn on whether her climate plans included a carbon tax, declaring she still supported an emissions trading system from 2012, while saying there were things the government could do in the meantime. Although not wanting a hasty solution, many business figures do want whichever party is successful at the forthcoming election to set a clear direction on climate policy.

"It is my firm view that a broad-based cap-and-trade emissions trading scheme is the best way to deliver least cost solutions for reducing emissions," he said. An interim carbon price has been backed by MPs. One said a carbon tax was now the only option to restore Labor's battered reputation.